Presidential spokesperson İbrahim Kalın has announced economy was on the table in the first cabinet meeting of the new period and that the Medium Term Program would be announced in a few weeks.
The new cabinet ministers and economy-related ministers, long awaited by the markets, were announced on July 9. Some of the appointments to the cabinet and to economy-related ministries are rather surprising.
The markets are keeping a close eye on cabinet members to be named on July 9. Analysts argue that naming the cabinet and the economic management team would not do the job, but equally important is the decision the Central Bank is set to make at its July 24 monetary policy committee meeting.
We are only now starting to see the economic effects of what happened prior to the June 24 elections. The June inflation rate, which will be announced today, is expected to stand at 1.4 percent, whereas the consumer price index is expected to see a 14 percent rise on a yearly basis.
The Turkish markets seem to be volatile after the presidential and parliamentary elections on June 24. While the market players wait to see the new economic management team and the policy agenda, the business world has already declared their demands for reform.
All eyes will be on exchange rates and interest rates this week. Everybody will be asking the same question: “Where will the exchange rates be standing ahead of the elections scheduled for June 24?” However, it would be more correct to say that the biggest challenge the Turkish economy will face in the period ahead is the issue of “rebuilding the necessary confidence in the post-election era.”
The United States dollar/Turkish Lira rate has eased to 4.46 after a series of rate hikes, but how long the exchange rate will stay at this level is just a guess. The most curious issue in the short term is the course exchange rates will follow at a time when elections are drawing near. This will be a “heavy week” with some crucial economic data being revealed. Those data releases and decisions to be announced will play a key role in setting the course for exchange rates.
The Organization for Economic Co-operation and Development (OECD) argued in an analysis on the Turkish economy that “a credible macroeconomic framework is of utmost importance for Turkey.”
Following the recent visit of Deputy Prime Minister Mehmet Şimşek and Turkish Central Bank Governor Murat Çetinkaya to London, the exchange rates in Turkey have seriously retreated. Some commentators have said that it was because foreign investors were reassured, whereas others deem the change just as a rebound from the Turkish Lira’s historic lows.
